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Hot rolled coil products will still be imported because the domestic supply can only meet more than 50% of domestic demand. Photo: NT

According to the Ministry of Industry and Trade, in order to recover the economy due to the impact of the Covid-19 pandemic, governments around the world have issued many economic stimulus packages of tens of trillions of dollars, increasing the prices of primary raw materials (oil, raw materials, material transportation).

After a period of unusual price rises (from December 2020), currently, the steel market has stabilized. The price of steel products has formed a new plan of cost price according to reality.

In the Vietnamese market, statistics show that the amount of raw materials for steel production is mainly imported (except for Thai Nguyen Iron and Steel Joint Stock Company of Vietnam Steel Corporation uses self-exploited iron ore materials with a low output of about 300,000 tons/year). The amount of iron ore and scrap steel for steel production in 2021 is expected to increase significantly compared to 2020.

Based on financial invoices provided by steel producers, the price of imported raw materials of steel factories increased. Of which, the iron ore price in May 2021 increased 2.4 times compared to February 2020 (ore price increased from US$86/ton to US$206/ton) and increased 32% compared to December 2020 (from US$156/ton to US$206/ton).

The price of scrap steel in May 2021 increased by 1.9 times compared to the price in February 2020 (ore price increased from US$270/ton to US$512/ton) and by 18% compared to December 2020 (from US$435/ton to US$512/ton).

However, the price of iron ore mined at Thai Nguyen Iron and Steel Joint Stock Company is less volatile. Iron ore price in May 2021 compared to February 2020 only increased by 8%.

According to reports of steel manufacturers, the selling price of steel products in the first five months of 2021 increased compared to 2020 due to fluctuations in input material prices. However, the increase in product sales is still lower than the increase in input prices.

Specifically, the steel billet price in May 2021 increased by 62% compared to the price in February 2020 (from VND9,433,697/ton to VND15,278,360/ton) and increased 41% compared to December 2020 (from VND10,800,000/ton to VND15,278,360/ton).

As for construction steel prices, steel prices in May 2021 increased by 49% compared to February 2020 prices (from VND11,340,608 /ton to VND16,869,341/ton) and by 30% compared to December 2020 (from VND12,944,499/ton to VND16,869,341/ton).

For hot-rolled coil (HRC) price, the price of HRC steel in May 2021 increased by 94% compared to the price in February 2020 (from VND9,000,000/ton to VND17,500,000/ton) and increased compared to December 2020 by 48% (from VND11,800,000/ton to VND17,500,000/ton).

According to the reports of the units, in the first five months of 2021, steel consumption is stable and has a high growth rate, providing enough for the market's demand for construction steel and galvanized steel products of all kinds.

For export steel products, the Ministry of Industry and Trade further informed that Hoa Phat Group plans to reduce the output of exported steel billet to serve domestic processing factories (expected to export 730,000 tons in 2021, down 44 % compared to 2020).

The situation of production, supply-demand of steel products in 2021 is considered by experts to continue to develop stably. Ordinary construction steel products meet steel demand for the domestic market and tend to grow slower than in the first six months of the year. Meanwhile, HRC steel products will still be imported because domestic supply can only meet more than 50% of domestic demand.

It is forecasted that by the end of 2021, the price of finished steel (traded on the Chinese market) will decrease to the price of US$696.76/ton; iron ore price 62% (delivered at Tianjin port, China) will decrease to US$200/ton.

According to a report of the Vietnam Steel Association, in the first six months of 2021, Vietnam's steel production reached more than 15.9 million tons of all kinds, up 37% over the same period in 2020 (in which, steel billet reached 11.1 million tons, up 29% over the same period in 2020). Consumption of steel products in the first six months of 2021 reached more than 14.05 million tons, up 35% over the same period in 2020 (of which, steel billet 10.08 million tons, up 29% over the same period in 2020).